1. Cybersecurity threats.

Cybersecurity preparedness is essential in 2018 as the risk of, and associated adverse impact of, breaches continue to rise. The past year redefined the upward bounds of the megabreach, including the Yahoo!, Equifax and Uber hacks, and the SEC cyber-attack. As Securities and Exchange Commission (SEC) Co-Directors of Enforcement Stephanie Avakian and Steven Peikin warned, “The greatest threat to our markets right now is the cyber threat.” No crisis should go to waste. Boards should learn from others’ misfortunes and focus on governance, crisis management and recommended best practices relating to cyber issues.

2. Corporate social responsibility.

By embracing corporate social responsibility (CSR) initiatives, boards are able to proactively identify and address legal, financial, operational and reputational risks in a way that can increase the company value to all stakeholders-investors, shareholders, employees and consumers. Boards should invest in CSR programming as an integral element of company risk assessment and compliance programs, and should advocate public reporting of CSR initiatives. Such initiatives can serve as both differentiating and value-enhancing factors. According to recent studies, companies with strong CSR practices are less likely to suffer large price declines, and they tend to have better three- to five-year returns on equity, as well as a greater chance of long-term success.

3. Managing five generations of employees.

In the coming years, employers will face the unprecedented challenge of having five generations of employees in the workplace. Companies and their boards can help address these tensions by better understanding employee expectations, encouraging cross-generation mentorship, and setting an example of generational diversity with respect to company leadership and members of the board. If managed correctly, boards and companies alike can benefit from the wisdom, collaboration and innovation that comes with generational diversity.

4. Corporate strategy.

Strategic planning with a particular focus on potential acquisitions should continue to be a high priority for boards in 2018. Boards should expect to face conflicting pressures, since shareholders will expect companies to invest in both long-term growth opportunities and short-term stock enhancement measures, including the deployment of excess cash for stock buybacks. Cross-border transactions will likely continue to be attractive options, subject to increased regulatory scrutiny in certain industries and of certain buyers.

5. Board composition.

Board diversity is being actively considered and encouraged by regulators, corporate governance groups and investors, both in the United States and internationally, and the current focus on board diversity is likely to continue. Companies should review the applicable diversity-related obligations in their jurisdictions and assess their current board composition, director search and nomination process, board refreshment practices and diversity policies.

6. Shareholder activism.

Shareholder activism has entrenched itself in the modern climate of corporate governance. In particular, shareholder activists have entered industries that, until recently, have generally steered clear of such investors, including the energy sector. There is an increased emphasis by prominent investors on challenging transactions, corporate strategy and traditional corporate governance concerns, such as board composition and staggered boards.

7. Internal investigations.

Boards are increasingly confronted with the possibility of wrongdoing implicating the company or its employees. The decision whether or not to undertake an independent internal investigation, and how, requires careful consideration and consultation with counsel, since the response of the board will have important implications for the ultimate effects on the company.

8. SEC regulatory relief.

We expect that the Trump administration and the Republican-led U.S. Congress will advance reforms in 2018 designed to encourage companies toward public ownership and to facilitate capital formation in both public and private markets. Although smaller companies will likely be the greatest beneficiaries of the proposals currently being considered, many proposals are expected to also benefit large public companies-by eliminating certain duplicative and nonmaterial disclosure requirements and by addressing concerns regarding shareholder proposals.

9. SEC enforcement.

In addition to new leadership at the SEC, ambitious legislative proposals in Congress and further developments in insider trading law have the potential to impact SEC enforcement, although certain enforcement streams, such as accounting and other disclosure-related investigations, are likely to remain largely unchanged. The SEC’s own cyber breach has brought renewed focus at the agency on information security and the integrity of trading systems. Efforts to repeal Dodd-Frank have also advanced through both chambers of Congress.

10. Trade and sanctions.

During the first year of the Trump administration, U.S. sanctions were expanded significantly to include complex new restrictions that target transactions with Iran, Russia, North Korea and Venezuela, among others. Additionally, there has been an uptick in sanctions enforcement actions, including a continued focus by U.S. enforcement agencies on officers and directors that approve, or engage in, proscribed activities. Accordingly, in an effort to avoid running afoul of U.S. sanctions, boards should be vigilant in understanding how these evolving rules apply to the business activities of their companies and management teams.

Special Bonus: Tax reform.

Tax reform has been a top priority for the Trump Administration and Republicans in Congress. After a slow start to 2017 in terms of legislative wins, the House and Senate are poised to send the first comprehensive tax reform bill to the President’s desk in more than thirty years. While the differences between the House and Senate bills still need to be resolved, the new Tax Cuts and Jobs Act is expected to pass by the end of the year and will present both benefits and challenges for companies in implementation and adaptation as unintended consequences are inevitably uncovered in the months and years to come.